Self-Regulatory Organizations: Investors Exchange LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX Rule 11.190(b)(13) To Discontinue the Market Maker Peg Order and Make Conforming Changes, 39251-39253 [2020-14011]
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Federal Register / Vol. 85, No. 126 / Tuesday, June 30, 2020 / Notices
providing new pathways for companies
to access the public markets.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were solicited
or received with respect to the proposed
rule change.
III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as modified by Amendment No.
2, is consistent with the Act. Comments
may be submitted by any of the
following methods:
khammond on DSKJM1Z7X2PROD with NOTICES
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NYSE–2019–67 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to File
Number SR–NYSE–2019–67. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549 on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of such
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change.
Persons submitting comments are
cautioned that we do not redact or edit
personal identifying information from
comment submissions. You should
VerDate Sep<11>2014
18:18 Jun 29, 2020
Jkt 250001
submit only information that you wish
to make available publicly. All
submissions should refer to File
Number SR–NYSE–2019–67, and
should be submitted on or before July
21, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.31
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–14013 Filed 6–29–20; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–89146; File No. SR–IEX–
2020–07]
Self-Regulatory Organizations:
Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of
Proposed Rule Change To Amend IEX
Rule 11.190(b)(13) To Discontinue the
Market Maker Peg Order and Make
Conforming Changes
39251
the proposed rule change is available at
the Exchange’s website at
www.iextrading.com, at the principal
office of the Exchange, and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
self-regulatory organization included
statements concerning the purpose of
and basis for the proposed rule change
and discussed any comments it received
on the proposed rule change. The text
of these statement [sic] may be
examined at the places specified in Item
IV below. The self-regulatory
organization has prepared summaries,
set forth in Sections A, B, and C below,
of the most significant aspects of such
statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
June 24, 2020.
1. Purpose
Pursuant to Section 19(b)(1) 1 of the
Securities Exchange Act of 1934 (the
‘‘Act’’) 2 and Rule 19b–4 thereunder,3
notice is hereby given that, on June 15,
2020, the Investors Exchange LLC
(‘‘IEX’’ or the ‘‘Exchange’’) filed with the
Securities and Exchange Commission
(the ‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the self-regulatory organization. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
The purpose of this proposed rule
change is to amend IEX Rule
11.190(b)(13) (Market Maker Peg Order)
to discontinue the Market Maker Peg
Order and make conforming changes to
other IEX rules.
The Market Maker Peg order is a onesided displayed limit order that is
designed to simplify market maker
compliance with the continuous quoting
and pricing obligations set forth in IEX
Rule 11.151 by providing quotation
adjusting functionality.8 Only IEX
Members registered as Market Makers
pursuant to IEX Rule 11.150 may use
Market Maker Peg Orders, and use of
such orders is optional.
In addition to its quotation adjusting
functionality, the Market Maker Peg
order is also designed to provide an
effective compliance tool to facilitate
market makers’ compliance with the
requirements of Rule 15c3–5 under the
Act (the ‘‘Market Access Rule’’) 9 and
Regulation SHO.10 Specifically, when
using a Market Maker Peg order, market
makers would have control of order
origination, as required by the Market
Access Rule, while also allowing market
makers to make marking and locate
determinations prior to order entry, as
required by Regulation SHO, while also
facilitating compliance with their
Exchange market making obligations.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
Pursuant to the provisions of Section
19(b)(1) under the Act 4 and Rule 19b–
4 thereunder,5 IEX is filing with the
Commission a proposed rule change to
amend IEX Rule 11.190(b)(13) (Market
Maker Peg Order) to discontinue the
Market Maker Peg Order and make
conforming changes. The Exchange has
designated this rule change as ‘‘noncontroversial’’ under Section 19(b)(3)(A)
of the Act 6 and provided the
Commission with the notice required by
Rule 19b–4(f)(6) thereunder.7 The text of
31 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 15 U.S.C. 78a.
3 17 CFR 240.19b–4.
4 15 U.S.C. 78s(b)(1).
5 17 CFR 240.19b–4.
6 15 U.S.C. 78s(b)(3)(A).
7 17 CFR 240.19b–4.
1 15
PO 00000
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Fmt 4703
Sfmt 4703
8 See IEX Rule 11.190(b)(13) for a complete
description of the Market Maker Peg order.
9 17 CFR 240.15c3–5.
10 17 CFR 242.200 through 242.204.
E:\FR\FM\30JNN1.SGM
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39252
Federal Register / Vol. 85, No. 126 / Tuesday, June 30, 2020 / Notices
khammond on DSKJM1Z7X2PROD with NOTICES
Market Maker Peg Orders are not
eligible for routing pursuant to IEX Rule
11.230(b) and are always displayed on
the Exchange. In addition, a new
timestamp is created for the order each
time that it is automatically adjusted in
accordance with the proposed rule.
Market Maker Peg Orders may only be
entered by a registered Market Maker,
pursuant to IEX Rule 11.150.
There are currently no Members
registered as Market Makers and
therefore no Members eligible to use the
order. Accordingly, the Exchange
proposes to discontinue the Market
Maker Peg order, delete the existing text
of IEX Rule 11.190(b)(13) (which
describes the Market Maker Peg order),
and reserve that provision.
In conjunction with the proposed
discontinuation of the Market Maker
Peg order, the Exchange proposes to
make two conforming changes. First, the
Exchange proposes to delete the text of
IEX Rule 11.340(d)(1)(A), related to
rounding of the price of Market Maker
Peg Orders in connection with the Plan
to Implement a Tick Size Pilot Program
(which has terminated). Second, the
Exchange proposes to delete text in IEX
Rule 11.510(c)(1) which provides that,
pursuant to Rule 11.190(b)(13), each
time a Market Maker Peg Order is
automatically adjusted by the System,
all inbound and outbound
communications related to the modified
order instruction will traverse an
additional POP between the Market
Maker Peg Order repricing logic and the
Order Book. Both of these provisions are
rendered obsolete with the
discontinuation of the Market Maker
Peg order, as proposed.
2. Statutory Basis
IEX believes that the proposed rule
change is consistent with Section 6(b) of
the Act in general,11 and furthers the
objectives of Section 6(b)(5) of the Act,12
in particular, in that it is designed to
prevent fraudulent and manipulative
acts and practices, to promote just and
equitable principles of trade, to foster
cooperation and coordination with
persons engaged in facilitating
transactions in securities, to remove
impediments to and perfect the
mechanism of a free and open market
and a national market system and, in
general, to protect investors and the
public interest.
As discussed in the Purpose section,
the proposed rule change is designed to
discontinue the Market Maker Peg
Order, because no Members are eligible
to use the order type. Consequently, the
11 15
U.S.C. 78f.
12 15 U.S.C. 78f(b)(5).
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18:18 Jun 29, 2020
Jkt 250001
Exchange believes is consistent with the
protection of investors and the public
interest to discontinue the Market
Maker Peg Order since the lack of
current demand for the order type does
not warrant the infrastructure and
ongoing maintenance expenses required
to support it. Further, the Exchange
believes that the proposed rule change
is consistent with the protection of
investors and the public interest since it
is designed to avoid any potential
confusion regarding the availability of
the Market Maker Peg Order to
Members. In addition, the Exchange
notes that use of the Market Maker Peg
Order is purely optional on the part of
a Market Maker and, in the event that
any Member were to register as a Market
Maker, such Member could use other
IEX order types to comply with the
continuous quoting and pricing
obligations set forth in IEX Rule 11.151.
Lastly, the Exchange does not believe
that this proposal will permit unfair
discrimination among customers,
brokers, or dealers because the Market
Maker Peg Order will no longer be
available to any Member of the
Exchange.
Further, the Exchange believes that
the proposed conforming rule changes,
as discussed in the Purpose section, are
consistent with the protection of
investors and the public interest
because they will provide clarity to
market participants by deleting
references to the now discontinued
Market Maker Peg Order.
B. Self-Regulatory Organization’s
Statement on Burden on Competition
The Exchange does not believe that
the proposal will impose any burden on
competition not necessary or
appropriate in furtherance of the
purposes of the Act. The proposed rule
change is not designed to address any
competitive issues but rather remove an
order type for which there is currently
no demand and eliminate the
infrastructure and ongoing maintenance
expenses to support it.
Furthermore, the Exchange believes
the proposed rule change does not
impose any burden on intra-market
competition not necessary or
appropriate in furtherance of the
purposes of the Act because, as
described above, the Market Maker Peg
order will no longer be available to any
Member of the Exchange, and thus all
Members will be impacted in the same
manner. Further, as discussed in the
Statutory Basis section, use of the
Market Maker Peg Order by a registered
Market Maker is optional and not
required in order to comply with the in
PO 00000
Frm 00093
Fmt 4703
Sfmt 4703
the continuous quoting and pricing
obligations set forth in IEX Rule 11.151.
The Exchange also does not believe
that the proposed rule change would
impose a burden on inter-market
competition since other exchanges are
free to adopt or discontinue comparable
order types.
Finally, the proposed conforming rule
changes, as discussed in the Purpose
section, are not designed to address any
competitive issue, but rather to provide
clarity to market participants by
deleting references to the now
discontinued Market Maker Peg Order.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
Written comments were neither
solicited nor received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The Exchange has designated this rule
filing as non-controversial under
Section 19(b)(3)(A) 13 of the Act and
Rule 19b–4(f)(6) 14 thereunder. Because
the proposed rule change does not: (i)
Significantly affect the protection of
investors or the public interest; (ii)
impose any significant burden on
competition; and (iii) become operative
for 30 days from the date on which it
was filed, or such shorter time as the
Commission may designate, it has
become effective pursuant to Section
19(b)(3)(A) of the Act and Rule 19b–
4(f)(6) thereunder.
At any time within 60 days of the
filing of the proposed rule change, the
Commission summarily may
temporarily suspend such rule change if
it appears to the Commission that such
action is necessary or appropriate in the
public interest, for the protection of
investors, or otherwise in furtherance of
the purposes of the Act. If the
Commission takes such action, the
Commission shall institute proceedings
under Section 19(b)(2)(B) 15 of the Act to
determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
13 15
U.S.C. 78s(b)(3)(A).
CFR 240.19b–4(f)(6).
15 15 U.S.C. 78s(b)(2)(B).
14 17
E:\FR\FM\30JNN1.SGM
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Federal Register / Vol. 85, No. 126 / Tuesday, June 30, 2020 / Notices
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
IEX–2020–07 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
khammond on DSKJM1Z7X2PROD with NOTICES
All submissions should refer to File
Number SR–IEX–2020–07. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing will also be available for
inspection and copying at the IEX’s
principal office and on its internet
website at www.iextrading.com. All
comments received will be posted
without change. Persons submitting
comments are cautioned that we do not
redact or edit personal identifying
information from comment submissions.
You should submit only information
that you wish to make available
publicly. All submissions should refer
to File Number SR–IEX–2020–07 and
should be submitted on or before July
21, 2020.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.16
J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020–14011 Filed 6–29–20; 8:45 am]
BILLING CODE 8011–01–P
16 17
CFR 200.30–3(a)(12).
VerDate Sep<11>2014
18:18 Jun 29, 2020
Jkt 250001
39253
SECURITIES AND EXCHANGE
COMMISSION
Maintenance Fee set forth in Addendum
A of the Rules.6
[Release No. 34–89141; File No. SR–NSCC–
2020–011]
Maintenance Fee
Self-Regulatory Organizations;
National Securities Clearing
Corporation; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Modify the Clearing
Fund Maintenance Fee
June 24, 2020.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b-4 thereunder,2
notice is hereby given that on June 16,
2020, National Securities Clearing
Corporation (‘‘NSCC’’) filed with the
Securities and Exchange Commission
(‘‘Commission’’) the proposed rule
change as described in Items I, II and III
below, which Items have been prepared
by the clearing agency. NSCC filed the
proposed rule change pursuant to
Section 19(b)(3)(A) of the Act 3 and Rule
19b–4(f)(2) thereunder.4 The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Clearing Agency’s Statement of the
Terms of Substance of the Proposed
Rule Change
The proposed rule change consists of
amendments to the Clearing Fund
Maintenance Fee (‘‘Maintenance Fee’’)
set forth in Addendum A of the NSCC
Rules & Procedures (‘‘Rules’’).5
II. Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
In its filing with the Commission, the
clearing agency included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
clearing agency has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
(A) Clearing Agency’s Statement of the
Purpose of, and Statutory Basis for, the
Proposed Rule Change
1. Purpose
The purpose of the proposed rule
change is to modify the existing
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
U.S.C. 78s(b)(3)(A).
4 17 CFR 240.19b–4(f)(2).
5 Capitalized terms not defined herein are defined
in the Rules available at www.dtcc.com/∼/media/
Files/Downloads/legal/rules/nscc_rules.pdf.
2 17
The Maintenance Fee was
implemented in 2016 pursuant to a
proposed rule change (‘‘2016 Rule
Change’’) in order to (i) diversify
NSCC’s revenue sources, mitigating
NSCC’s dependence on revenues driven
by trading volumes, and (ii) add a stable
revenue source that would contribute to
NSCC’s operating margin by offsetting
increasing costs and expenses.7 The fee
is charged to all NSCC Members and
Limited Members that are required to
make deposits to the NSCC Clearing
Fund (collectively, ‘‘Members’’) in
proportion to the Member’s average
monthly cash deposit to the Clearing
Fund.
Since the 2016 Rule Change, the
Maintenance Fee has been calculated
monthly, in arrears, as the product of
(A) 0.25 percent and (B) the average of
the Member’s actual cash deposit to the
NSCC Clearing Fund as of the end of
each day of the month, multiplied by
the number of days in that month and
divided by 360. However, by its terms,
the fee is waived if the monthly rate of
return on NSCC’s investment of the cash
portion of the Clearing Fund was less
than 0.25 percent for the month
(‘‘Waiver Provision’’).
NSCC represents that the Waiver
Provision was included for the benefit
of Members. NSCC believed that if its
monthly rate of return on the
investment of cash from the Clearing
Fund was less than 0.25 percent, then
Members would likely be experiencing
similarly low interest income on their
deposits, including excess reserves, if
applicable; in which case, NSCC would
waive the fee. Although this approach
exposed NSCC to the risk of not
receiving revenue from the Maintenance
Fee at a time of increased costs, NSCC
did not believe that such an exposure
would be common, significant, or longterm. Moreover, at the time of adoption,
NSCC’s default liquidity resources were
not as diversified and robust as they are
now, nor were such resources as costly
or expensive to secure and maintain, as
described below.
Increased Costs and Expenses
Due to the coronavirus global
pandemic and overall reaction by the
financial markets, NSCC’s cost of
funding has risen sharply in 2020,
particularly for three of NSCC’s key
3 15
PO 00000
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Fmt 4703
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6 Addendum
A, Rules, supra note 5.
Exchange Act Release No. 78525
(August 9, 2016), 81 FR 54146 (August 15, 2016)
(SR–NSCC–2016–002).
7 Securities
E:\FR\FM\30JNN1.SGM
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]]>Agencies
[Federal Register Volume 85, Number 126 (Tuesday, June 30, 2020)]
[Notices]
[Pages 39251-39253]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-14011]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-89146; File No. SR-IEX-2020-07]
Self-Regulatory Organizations: Investors Exchange LLC; Notice of
Filing and Immediate Effectiveness of Proposed Rule Change To Amend IEX
Rule 11.190(b)(13) To Discontinue the Market Maker Peg Order and Make
Conforming Changes
June 24, 2020.
Pursuant to Section 19(b)(1) \1\ of the Securities Exchange Act of
1934 (the ``Act'') \2\ and Rule 19b-4 thereunder,\3\ notice is hereby
given that, on June 15, 2020, the Investors Exchange LLC (``IEX'' or
the ``Exchange'') filed with the Securities and Exchange Commission
(the ``Commission'') the proposed rule change as described in Items I,
II and III below, which Items have been prepared by the self-regulatory
organization. The Commission is publishing this notice to solicit
comments on the proposed rule change from interested persons.
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 15 U.S.C. 78a.
\3\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
Pursuant to the provisions of Section 19(b)(1) under the Act \4\
and Rule 19b-4 thereunder,\5\ IEX is filing with the Commission a
proposed rule change to amend IEX Rule 11.190(b)(13) (Market Maker Peg
Order) to discontinue the Market Maker Peg Order and make conforming
changes. The Exchange has designated this rule change as ``non-
controversial'' under Section 19(b)(3)(A) of the Act \6\ and provided
the Commission with the notice required by Rule 19b-4(f)(6)
thereunder.\7\ The text of the proposed rule change is available at the
Exchange's website at www.iextrading.com, at the principal office of
the Exchange, and at the Commission's Public Reference Room.
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(1).
\5\ 17 CFR 240.19b-4.
\6\ 15 U.S.C. 78s(b)(3)(A).
\7\ 17 CFR 240.19b-4.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, the self-regulatory organization
included statements concerning the purpose of and basis for the
proposed rule change and discussed any comments it received on the
proposed rule change. The text of these statement [sic] may be examined
at the places specified in Item IV below. The self-regulatory
organization has prepared summaries, set forth in Sections A, B, and C
below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this proposed rule change is to amend IEX Rule
11.190(b)(13) (Market Maker Peg Order) to discontinue the Market Maker
Peg Order and make conforming changes to other IEX rules.
The Market Maker Peg order is a one-sided displayed limit order
that is designed to simplify market maker compliance with the
continuous quoting and pricing obligations set forth in IEX Rule 11.151
by providing quotation adjusting functionality.\8\ Only IEX Members
registered as Market Makers pursuant to IEX Rule 11.150 may use Market
Maker Peg Orders, and use of such orders is optional.
---------------------------------------------------------------------------
\8\ See IEX Rule 11.190(b)(13) for a complete description of the
Market Maker Peg order.
---------------------------------------------------------------------------
In addition to its quotation adjusting functionality, the Market
Maker Peg order is also designed to provide an effective compliance
tool to facilitate market makers' compliance with the requirements of
Rule 15c3-5 under the Act (the ``Market Access Rule'') \9\ and
Regulation SHO.\10\ Specifically, when using a Market Maker Peg order,
market makers would have control of order origination, as required by
the Market Access Rule, while also allowing market makers to make
marking and locate determinations prior to order entry, as required by
Regulation SHO, while also facilitating compliance with their Exchange
market making obligations.
---------------------------------------------------------------------------
\9\ 17 CFR 240.15c3-5.
\10\ 17 CFR 242.200 through 242.204.
---------------------------------------------------------------------------
[[Page 39252]]
Market Maker Peg Orders are not eligible for routing pursuant to
IEX Rule 11.230(b) and are always displayed on the Exchange. In
addition, a new timestamp is created for the order each time that it is
automatically adjusted in accordance with the proposed rule. Market
Maker Peg Orders may only be entered by a registered Market Maker,
pursuant to IEX Rule 11.150.
There are currently no Members registered as Market Makers and
therefore no Members eligible to use the order. Accordingly, the
Exchange proposes to discontinue the Market Maker Peg order, delete the
existing text of IEX Rule 11.190(b)(13) (which describes the Market
Maker Peg order), and reserve that provision.
In conjunction with the proposed discontinuation of the Market
Maker Peg order, the Exchange proposes to make two conforming changes.
First, the Exchange proposes to delete the text of IEX Rule
11.340(d)(1)(A), related to rounding of the price of Market Maker Peg
Orders in connection with the Plan to Implement a Tick Size Pilot
Program (which has terminated). Second, the Exchange proposes to delete
text in IEX Rule 11.510(c)(1) which provides that, pursuant to Rule
11.190(b)(13), each time a Market Maker Peg Order is automatically
adjusted by the System, all inbound and outbound communications related
to the modified order instruction will traverse an additional POP
between the Market Maker Peg Order repricing logic and the Order Book.
Both of these provisions are rendered obsolete with the discontinuation
of the Market Maker Peg order, as proposed.
2. Statutory Basis
IEX believes that the proposed rule change is consistent with
Section 6(b) of the Act in general,\11\ and furthers the objectives of
Section 6(b)(5) of the Act,\12\ in particular, in that it is designed
to prevent fraudulent and manipulative acts and practices, to promote
just and equitable principles of trade, to foster cooperation and
coordination with persons engaged in facilitating transactions in
securities, to remove impediments to and perfect the mechanism of a
free and open market and a national market system and, in general, to
protect investors and the public interest.
---------------------------------------------------------------------------
\11\ 15 U.S.C. 78f.
\12\ 15 U.S.C. 78f(b)(5).
---------------------------------------------------------------------------
As discussed in the Purpose section, the proposed rule change is
designed to discontinue the Market Maker Peg Order, because no Members
are eligible to use the order type. Consequently, the Exchange believes
is consistent with the protection of investors and the public interest
to discontinue the Market Maker Peg Order since the lack of current
demand for the order type does not warrant the infrastructure and
ongoing maintenance expenses required to support it. Further, the
Exchange believes that the proposed rule change is consistent with the
protection of investors and the public interest since it is designed to
avoid any potential confusion regarding the availability of the Market
Maker Peg Order to Members. In addition, the Exchange notes that use of
the Market Maker Peg Order is purely optional on the part of a Market
Maker and, in the event that any Member were to register as a Market
Maker, such Member could use other IEX order types to comply with the
continuous quoting and pricing obligations set forth in IEX Rule
11.151. Lastly, the Exchange does not believe that this proposal will
permit unfair discrimination among customers, brokers, or dealers
because the Market Maker Peg Order will no longer be available to any
Member of the Exchange.
Further, the Exchange believes that the proposed conforming rule
changes, as discussed in the Purpose section, are consistent with the
protection of investors and the public interest because they will
provide clarity to market participants by deleting references to the
now discontinued Market Maker Peg Order.
B. Self-Regulatory Organization's Statement on Burden on Competition
The Exchange does not believe that the proposal will impose any
burden on competition not necessary or appropriate in furtherance of
the purposes of the Act. The proposed rule change is not designed to
address any competitive issues but rather remove an order type for
which there is currently no demand and eliminate the infrastructure and
ongoing maintenance expenses to support it.
Furthermore, the Exchange believes the proposed rule change does
not impose any burden on intra-market competition not necessary or
appropriate in furtherance of the purposes of the Act because, as
described above, the Market Maker Peg order will no longer be available
to any Member of the Exchange, and thus all Members will be impacted in
the same manner. Further, as discussed in the Statutory Basis section,
use of the Market Maker Peg Order by a registered Market Maker is
optional and not required in order to comply with the in the continuous
quoting and pricing obligations set forth in IEX Rule 11.151.
The Exchange also does not believe that the proposed rule change
would impose a burden on inter-market competition since other exchanges
are free to adopt or discontinue comparable order types.
Finally, the proposed conforming rule changes, as discussed in the
Purpose section, are not designed to address any competitive issue, but
rather to provide clarity to market participants by deleting references
to the now discontinued Market Maker Peg Order.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
The Exchange has designated this rule filing as non-controversial
under Section 19(b)(3)(A) \13\ of the Act and Rule 19b-4(f)(6) \14\
thereunder. Because the proposed rule change does not: (i)
Significantly affect the protection of investors or the public
interest; (ii) impose any significant burden on competition; and (iii)
become operative for 30 days from the date on which it was filed, or
such shorter time as the Commission may designate, it has become
effective pursuant to Section 19(b)(3)(A) of the Act and Rule 19b-
4(f)(6) thereunder.
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\13\ 15 U.S.C. 78s(b)(3)(A).
\14\ 17 CFR 240.19b-4(f)(6).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission shall institute proceedings under
Section 19(b)(2)(B) \15\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\15\ 15 U.S.C. 78s(b)(2)(B).
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IV. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
[[Page 39253]]
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
File Number SR-IEX-2020-07 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to File Number SR-IEX-2020-07. This file
number should be included on the subject line if email is used. To help
the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml).
Copies of the submission, all subsequent amendments, all written
statements with respect to the proposed rule change that are filed with
the Commission, and all written communications relating to the proposed
rule change between the Commission and any person, other than those
that may be withheld from the public in accordance with the provisions
of 5 U.S.C. 552, will be available for website viewing and printing in
the Commission's Public Reference Room, 100 F Street NE, Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. Copies of the filing will also be available for inspection
and copying at the IEX's principal office and on its internet website
at www.iextrading.com. All comments received will be posted without
change. Persons submitting comments are cautioned that we do not redact
or edit personal identifying information from comment submissions. You
should submit only information that you wish to make available
publicly. All submissions should refer to File Number SR-IEX-2020-07
and should be submitted on or before July 21, 2020.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\16\
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\16\ 17 CFR 200.30-3(a)(12).
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J. Matthew DeLesDernier,
Assistant Secretary.
[FR Doc. 2020-14011 Filed 6-29-20; 8:45 am]
BILLING CODE 8011-01-P
